Post Office Monthly Income Scheme: In these tough times when prospects of pay cuts and even job losses are high, many people would be looking at alternative options to earn money. Yes, a second source of guaranteed money inflow into bank account, apart from salary via jobs, so that they can keep earning even if they lose their jobs or pay is cut. here is one very interesting one. Like any public-sector banks, post offices also offer a number of small saving schemes. One such scheme is the Post Office Monthly Income Scheme (POMIS). This is a government-backed scheme to encourage the public to set aside some money every month. An attractive interest is added to the money set-aside and is returned to the account holder on a monthly basis. Effective from 1 December 2011, the maturity period is five years from the date of deposit. You can make a nomination at the time of opening the account or at a later time.

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Is It Beneficial At Times Like This?

Investing in the Post Office Monthly Income Scheme is definitely beneficial at times when your income source is blocked and you are at despair. The scheme aims to secure your money so that it is not misspent and help you at the time of need. The lumpsum you have deposited in the account can be prematurely withdrawn whenever you need.

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Is Post Office Monthly Income Scheme Safe?

Post Office Monthly Income Scheme investment is government-backed; therefore, your money stays safe. The risk-free nature of the scheme makes it all the more favourable for risk-averse investors. You get a monthly income from the deposit as well as can be withdrawn during emergencies. Investment in POMIS proves to be a back-up when all the income sources are shut suddenly.

Are You Eligible?

Any individual who is a resident Indian can have an account under the scheme. To make it clear, non-resident Indians are not eligible to open a POMIS account. You can visit the nearest India Post branch to open the account. Remember that the account can be transferred to any post office branch without any cost.

In the case of a minor account holder, your age must be a minimum of 10 years to qualify for the scheme. For those below the age of 10 years or for a person with unsound mind, a guardian must manage the account. A minor, after attaining maturity, must apply for transfer of the account to his/her name. In addition, up to 3 adults can together open a joint account. You must know that a single account can be converted into a joint account and vice versa.

How Much To Deposit?

The deposit must be made in the multiples of Rs.1,500 and can deposit up to Rs.4.5 lakh. You can open any number of accounts in any branch. However, the maximum investment limit after summing up the balance in all the accounts must be Rs.4.5 lakh. In the case of a joint account, the individual share cannot exceed Rs.4.5 lakh with the maximum limit being Rs.9 lakh.

Interest Rate

According to the latest update, an interest rate of 6.6% p.a. is payable every month on the deposited amount. The interest rate is applicable for deposits from 1 April 2020. The interest rates are revised every quarter.

Withdrawal Rules You Should Know

Withdrawing funds from your POMIS account is as simple as presenting your passbook and a withdrawal application that is duly filled and signed by the account holder at the post office counter. 

If you are planning to withdraw the funds after one year but before the completion of three years, a sum equivalent to 2% of your deposit will be deducted. If the withdrawal application is submitted after the completion of three years, a deduction of 1% of the deposit will be made. However, the deduction is comparatively small when you think of the monetary relief you get.

(Authored by Archit Gupta, Founder and CEO at ClearTax)